Topic: MTGox lost 750K Bitcoins? (Read 10560 times)

So, I take it that you're of the mind that Bernie Madoff did his own taxes, and that Ken Lay and Jeffrey Skilling did Enron's taxes? Or that Henry, Emanuel, & Mayer Lehman would be doing their taxes? Arthur Andersen anyone? Ernst and Young? KPMG?

Financial regulation does not prevent financial fraud, or even slow it down. If you are willing to lie, you lie to your clients, you lie to your auditors, and you lie to whoever thinks they are regulating you. Then, you watch how often those that think they are regulating you decline to prosecute.

"Ja, Emanuel, I vas villing to lie und break zese 98 laws, to make zeven billion, but I vill not break 102 laws. ZAT iz unacceptable!!!"

Get real, fools.

I think they did have accounting controls.   

The real problem which they are not admitting is that they sold virtual BTC and the price exploded in their faces.

They have not been able to cover the short fall since early 2013.

I call bullshit. Even though Mt. Gox was grossly incompetent, it's hard to believe that they didn't have very basic accounting practices in place to catch this sort of issue.

Surely someone did audits and helped them do their taxes every year

Only if they were lost and not stolen.  If they were stolen, they've likely been being sold over the past months or years and are still in circulation.

As far as I know, the Japanese have chosen not to regulate bitcoin (rightfully so), so that may not be an issue at all.

Fraud or theft? That's another story of course. 8^]

Well, right. That is precisely the issue. A "complete amateur" is a term that applies well to Mt. Gox. They made it this far in spite of themselves.

But why would that be surprising? Something is often very wrong with very large and sophisticated companies' accounting; however, they are large enough to handle the corrections and writeoffs that often ensue.

Given what I know about Mt. Gox and its founder, no surprise there at all. Especially given the short time it has existed.

Agree.  I don't think any BTC was lost.  This was "virtual BTC" that Mt.Gox sold to their customers.

Mt.Gox owes them real BTC.

I doubt that there will be any company that will takeover Mt.Gox and take this liability.

not exactly.
"virtual BTC" generated by the incompetent mtgox is gone ... it's the 744k BTC.  

Still quite a bit. This means people who had some of that won't get their btc :-/

Bullish for BTC!

http://www.businessinsider.com/reports-mtgox-halts-all-trading-2014-2

at least 744,408 BTC — about 6% of all coins in existence — are now out of circulation

Mt gox is dead. 

 They just mentioned this on CNBC.

That's like how they were blaming transaction malleability.  I mean, after like the 3rd time in a week someone says "hey you never sent me the 100 btc", you might think they'd check into it more carefully.

no 750k bitcoins lost from Mt.gox,  Mt.gox still use cold storage strategy, but only half of its bitcions, so lose bitcoin number is less than 220k bitcoins, please never enlarge the rumor.

If it's a small team all of whom 'know' that they are making shed loads of profit, then perhaps they didn't do the obvious checks. That takes a staggering amount of incompetence though and does tempt conspiracy theories, because surely people are not that stupid.. so it 'must be' deliberate.

This is obviously BS,  Bitcoin is an electronic currency.  You can find out in micro-seconds how much coins are in your wallets.  To lose 750K Bitcoins over a long period and not know about it is really difficult to believe.  What is beliveable is Mt.Gox sold 750K of BTC that they never had.   Any auditing firm can find this out.

https://blockchain.info/address/1Drt3c8pSdrkyjuBiwVcSSixZwQtMZ3Tew

No. Transactions    623    
Total Received    782,558.72529011 BTC

If the coins were stolen, I believe it would have to have been done in a situation like you just described. What I can't understand is the stupidity involved. In order for this to happen all the way until you have only a couple thousand BTC left to your company's name, you have to be completely and utterly incompetent not for weeks or months, but for years on end. You would have to never ever realize that "hey I am bleeding money and not making any." They have to be almost impossibly stupid for this to happen. I don't know if we will ever get the full picture.

Bankruptcy protects a company from creditors.   Customer deposits is not money that a company like Gox should be able to use or steal.

So if these folks aren't made whole,  then it is theft.   This will be settles in a criminal court of law,  not a civil one.

Nice idea but surely that's the point of bankruptcy, they cut their losses and liability and we all hope then they don't start over - potentially those at fault getting a ban from being owner or on executive of companies in that one country.. hence the move to Singapore mooted in that leaked plan.

It's the NY Times for crying out loud. They don't need sources, duh.

Thats something like 15% of all Bitcoin in existence. Theres no way its possible they lost that much. Its not possible.

This is all unverified and until proven otherwise Im saying definitely BS, who knows how much they lost or what will happen but we need to calm down at this time.

Agree.  That 750,000 BTC was ficticious supply.  

IMHO, Mt.Gox problem when they started selling 'naked short' BTC probably since late 2011.   That is why they force the crash in April 2011,  they were big time short and needed to cover.  

Technically, the loss is actually Mt.Gox loss and the customer needs to be made whole.  A custiodian of customer's property has no right to steal that customers property.  Does not matter if it was fiat,  gold, btc or coffee beans.

IMHO, they were short short 750K bitcoins from at least two years ago.  In other words, they sold the public Bitcoin that did not exist.

The could not cover their short fall,  so the claim is they lost 750K bitcoins. 

yeah, the guy crushes mtgox by himself 

Lost your life savings? Lost everything??? visit the Office in japan Mtgox. this is who you should look for Founder/Ceo of MtGox

http://www.youtube.com/watch?v=ZddzSC7AuAw

If the background to that rumour is true and its been actioned over a long period, then it's likely the perp sold the coins as they aquired them. That is, they're not sat there holding 750k BTC but rather the price over the last few years has been depressed by those being sold. The theft then only becomes obvious now and those who thought they had coins on MtGox didn't really hold anything (flashes of fiat reality in my head), coupled with that all holders of BTC who've been spending in the real world on product or back out to fiat, have lost money to those theiving.

Which then is a good sign perhaps that the appitite for Bitcoins was sufficient to absorb that amount and still show a healthy rise. We'll have to wait and see now, if then the price of coins avaliable without MtGox interference, suggests there really is more demand than easy forged supply.

man, if you put your life savings in mtgox, you must the very stupid. and i think 99% will never see a satoshi back in their wallet.

@ joshv06

i think they were stolen but thats just my feeling.

maybe they are lost and our btc are now even more valuable  

Can someone please answer me this question.

I keep reading everywhere that Mt. Gox "Lost" 750k Bitcoins.

Did they lose them forever? Like when someone loses their private key, or hard drive crash.

Or

Were they stolen and still could be in circulation?

Thanks

Where are the NY times getting their sources from?

It's not dead, people have lots of money tied up over there. So, stfu.

here is what mark says to you:


@ EvilPanda

of course! cheap coins 

Are there really people dumb enough to send their money to the "new" gox when it launches?

is this real?

I wish gox would just die already and stop dragging down the value of our currency. I thought we all already saw this coming? Bye bye gox.

Sounds like it's true.
http://www.nytimes.com/2014/02/25/business/apparent-theft-at-mt-gox-shakes-bitcoin-world.html?_r=1

MtGox bought gox.com just like the document said. And gox.com is not pointing mtgox.com

There is even a website like http://goxbalance.com/

So MtGox got SilkRoaded?

Losing $300 million of customer funds over the course of many months is not just a screw-up. It's criminal.

A rather interesting question is whether the failure of MtGox to maintain proper accounting measures rises to the level of negligence.  I sure as hell wouldn't like to be the person explaining to whoever investigates corporate failures in Japan exactly why their accounting systems were so woefully inadequate.

So tell me again how their cold wallet "leaked" to their hot wallet?  And did this for a total of 750k coins.

That seems more like a river than a leak.

Remember this is Mt.Gox, so sounds about right

This is the 21st century.

There's no excuse for any Bitcoin company not to reconcile their BTC holdings each and every block.

your hero fails

If it is possible to loose 750K bitcoins, the only way - never never care what assests you have and what transactions you make. I do not think is it possible. This is just 3rd (?) fake message to public to cover something else, in my oppinion.

Half of that document isn't even in comprehensible English.

If you notice, it also says that cold storage got wiped out due to a leak in the hot wallet.  That can't be explained by transaction malleability alone. Something had to be very, very wrong with MtGox's accounting procedures for them not to realise that they had paid out more than they should have over such a long period of time.  

In fact the document explicitly says that "regardless of malleability and regulatory issues, MtGox's main problems are massive robbery and poor bitcoin accounting".

The short-fall should have shown up when they reconciled their accounts because the funds left their wallets twice even though it only showed up once in their accounts.  The discrepancy would have shown up when the hot wallet balance was lower than what it should have been according to "the books" - just the same as if the bank double processed every bill payment you made, you'd notice when you checked your bank balance because it would be lower than it should be.

A business that size should be reconciling their accounts at least daily.  There should have been procedures in place to ensure that the amount of funds shown as going out of the hot-wallet was the same as the amount which actually left the hot-wallet and it shouldn't have been possible to refill the hot wallet unless those two amounts reconciled.  If they weren't reconciling the hot wallet balance against the books then they had no mechanism in place to protect against embezzlement, either.

The malleability issue may have uncovered something deeper, but it's definitely not the whole story.  Just their book-keeping procedures should have revealed this.  If it's a long-standing problem, then a short-fall should have shown up when their financial statements were prepared last year (remember the Japanese financial year ends 31 March).

that is to dead,i do not care it.

it arleady dead in my heart!

Er... yes they did. It's right there in the Gox document.

Nobody said that they lost 750k BTC to transaction malleability.  gmaxwell pointed out a few days back that it was possible that they'd lost more than they claimed to that issue but it was far from their only problem.

We have no idea when MtGox was last independently audited.  It's entirely possible that it's only in trying to determine their losses due to the transaction malleability issue that they've looked far enough into their accounts to uncover other losses of which they were previously unaware.  Small companies, in particular, have a bad habit of not looking below the surface often enough.  

Huge financial institutions have constant checks and balances in place, spend billions on infrastructure,  and still incur losses.  It's all too easy to believe that MtGox had infrastructure totally insufficient for keeping track of their true financial situation.


MtGox hasn't even acknowledged the latest accusations yet.  They'd be foolish to issue any public statement without expert legal advice at this point, so I wouldn't expect anything definitive any time soon unless it's a public statement saying that they're filing for insolvency protection.

Well, I guess everyone already read the joint statement from the other exchanges, are there any confirmations on how big is the damage?

Site isn't down.  It's just totally empty now.

Site is now down and Yes, I find it equally suspicious that $750K was stolen under their noses without them noticing.  I smell greed in the picture.

They may be insolvent, they may have lost coins, but 750 000 bitcoins is a very big number, it's something like $ 375 000 000, they may not be the brightest people on the industry, but this too much.

The rumor does not fit it into the transaction malleability scheme, confirmed to be a fact by foundation people.
All big withdrawals were checked manually,Gox has tight withdrawal limits on unverified accounts(on verified in fact too).
Therefore stealing 750k is i think iMPOSSIBLE.

Is someone bringing the penny biotech stock dump and pump playbook to bitcoin?

The 750k lost bitcoin rumor whether true or not pushes a lot of investor buttons!

Non-redacted Page 7

https://i.imgur.com/8YbVJTc.png

They don't have coins?

Why would they stop the trading?

Not unconfirmed anymore, many members including myself are seeing this message.

The doc had me at Assets = Liabilities

Also heavy lols at the "Other Assets" page

/gg

FWIW, the supposed "leaked document" has now been posted on scribd and includes an alleged statement of assets and liabilities.  It's somewhat curious that the BTC amounts given in that statement are not rounded but the USD amounts are (the claim against CoinLab is for 5 million plus some, not an exact 5 million).

Here's a link to the document.

http://www.scribd.com/doc/209050732/MtGox-Situation-Crisis-Strategy-Draft

I remain skeptical about its authenticity for many reasons, not least of all because it reads like something put together by a complete amateur.

Unconfirmed reports on reddit that MtGox has now disabled trading.

Can anyone else access Charlie Shrem's Twitter?  Just went to check whether he's said anything more since the document was put on scribd and his Twitter seems to be gone.

Very smart thinking.
What do you think about the "roundness" of the number? 750K coins, why not 756,915 coins? or maybe it isn't rounded? (I didn't click the link),

You're assuming they even know how much they've lost, which might not be the case.  Small businesses often have terrible book-keeping practices and can leak funds all over the place without being aware of it.  You'd really want any statement about the amount of their losses to be independently verified by financial professionals (preferably forensic accountants).

Given how small the MtGox staff is, it would be rather pointless for someone to leak internal documents anonymously.  They might as well release the information with their own name attached as the source of the leak would be established quickly and I doubt any of the staff are so well paid that helping MtGox to cover up would benefit them greatly at this point.

The major problem with the continued silence on the part of MtGox is that all rumours are now being regarded as equally valid.  Some are probably much closer to the truth than others, but there's no real way to objectively assess their validity so people are reacting as though all of them are true or all of them are bullshit.

Here's a solution: MtGox should come out and state exactly how much bitcoins they have lost (hint, they just need to sum all the bitcoins in the accounts and compare them to how many bitcoins they actually have in their wallet), and promise to repair the losses from their own funds.

The longer MtGox doesn't communicate anything, the more such rumours seem believable.

I don't see how anyone could possibly fuck it up that badly, even Gox. Losing hundreds of millions of dollars without noticing? I think not.

I said this on the exact same OP post on another thread:


Please respond as I will not click that (to me) unknown link,

Thank you

Charlie Shrem is slowly becoming my hero

FUDDDDDDD

https://twitter.com/CharlieShrem/status/438111755093671936

Not to mention that it's not even written in the language which would be used by someone preparing a "Crisis Strategy Draft".  It's just not how such documents are written and if it was a genuine MtGox internal document then I'd be more concerned than ever about the competence of those running MtGox.

I'd love to have $100 for ever time I've read about something which supposedly came from a MtGox insider over the past couple of weeks.

Additionally, the owner of the tumblr says nothing at all which establishes him as someone who would have access to credible information regarding MtGox. 

LOL meter maxed out on this one. Crisis Strategy Draft. Right. No author, no date, no document link. Just a bunch of made up BS.

BS but based in real facts.

Mt gox is dead. Everyone should stop caring about what they get up to nowadays xD

More ways to scare the public...

I heard about 4000BTC

but I must say I do not care about MtGox at all.

Sounds like bullshit

Somebody please say it isn't so.

http://two-bit-idiot.tumblr.com/